text:
When a subsequent purchase is made, the entire amount of all payments made previous thereto shall be deemed to have been applied toward the payment of the previous deferred payment price or deferred payment prices. Each payment thereafter received shall be deemed to be allocated to all of the various deferred payment prices in the same proportion or ratio as the original cash sale prices of the various purchases bear to one another; where the amount of each installment payment is increased in connection with the subsequent purchase, the subsequent payments (at the seller’s election) may be deemed to be allocated as follows: an amount equal to the original payment to the previous deferred payment price, and an amount equal to the increase, to the subsequent deferred payment price. However, the amount of any initial or downpayment on the subsequent purchase shall be deemed to be allocated in its entirety to such purchase.

When a subsequent purchase under this section is made the seller shall deliver to the buyer, prior to the due date of the first installment, a memorandum which shall set forth the following:

(a) The names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer and a description of the goods and services sufficient to identify them. Services or multiple items of goods may be described in general terms and may be described in detail in a separate writing.

(b) The cash price of the goods, services and accessories which are the subject matter of the new retail installment sale.

(c) The amount of the buyer’s downpayment, itemizing the amounts paid in money and in goods and containing a brief description of the goods, if any, traded in.

(d) The difference between item (b) and item (c) which is the unpaid balance of cash price.

(e) The amount of the existing outstanding balance to be consolidated, which consists of the unpaid time balance or balances of the prior contract or contracts to be consolidated.

(f) The amount of any unearned finance charge, determined by deducting from the amount of item (e) any then unearned finance charge in an amount not less than the refund credit provided for in Article 6 (commencing with Section 1806.1) of this chapter (computed, however, without the allowance of any minimum earned finance charge).

(g) The difference between items (e) and (f), which is the net outstanding balance to be consolidated.

(h) The amount, if any, included for insurance, specifying the coverages.

(i) The amount, if any, of official fees.

(j) The unpaid balance, which is the sum of items (d), (g), (h) and (i).

(k) The finance charge (1) expressed as the annual percentage rate as defined in Regulation Z and (2) expressed in dollars, and computed in conformity with Section 1808.5.

(l) The number, amount, and due dates or periods of payment scheduled to repay the indebtedness and the sum of such payments.

(m) Any “balloon payments” as described in Section 1807.3.

The items need not be stated in the sequence or order set forth above; additional items may be included to explain the computations made in determining the amount to be paid by the buyer. If the finance charge or any portion thereof is calculated on the 365-day basis, the amount of the finance charge shown pursuant to item (k) shall be that amount which will be incurred by the buyer if all payments are received by the seller on their respective due dates.

history: (History: Amended by Stats. 1979, Ch. 805.)

title: 2. CREDIT SALES

article: 8. Add-on Sales


kind: section

code: CIV

text:
If a credit sale is one of a series of transactions made pursuant to an agreement providing for the addition of the amount financed plus the finance charge for the current sale to an existing outstanding balance, and the disclosures required under this article for the initial sale and each subsequent sale are delayed until some date prior to the date the first payment for that particular sale is due; and

(1) The customer has approved in writing both the annual percentage rate or rates and the method of treating any unearned finance charge on an existing outstanding balance in computing the finance charge or charges; and

(2) The seller retains no security interest in any property as to which he has received payments aggregating the amount of the sale price including any finance charges attributable thereto; then, for the purposes of this section, in the case of items purchased on different dates, the first purchased shall be deemed first paid for, and in the case of items purchased on the same date the lowest priced shall be deemed first paid for.

When a credit sale under this section is made, the seller shall deliver to the buyer, prior to the due date of the first installment, a memorandum which shall set forth the following:

(a) The names of the seller and the buyer, the place of business of the seller, the residence or place of business of the buyer as specified by the buyer and a description of the goods and services sufficient to identify them. Services or multiple items of goods may be described in general terms and may be described in detail in a separate writing.

(b) The cash price of the goods, services and accessories which are the subject matter of the new retail installment sale.

(c) The amount of the buyer’s downpayment, itemizing the amounts paid in money and in goods and containing a brief description of the goods, if any, traded in.

(d) The difference between item (b) and item (c), which is the unpaid balance of cash price.

(e) The amount, if any, included for insurance, specifying the coverages.

(f) The amount, if any, of official fees.

(g) The amount financed, which is the sum of items (d), (e) and (f).

(h) The amount of the finance charge (1) expressed as the annual percentage rate as defined in Regulation Z and (2) expressed in dollars, which is to be computed in accordance with this chapter.

(i) The deferred payment price, which is the sum of the amounts determined under items (b), (e), (f) and (h).

(j) The previous balance, which is the amount owing on prior purchases.

(k) The number, amount, and due dates or periods of payments scheduled to repay the indebtedness and the sum of such payments.

(l) Any “balloon payments,” as described in Section 1807.3.

The items need not be stated in the sequence or order set forth above; additional items may be included to explain the computations made in determining the amount to be paid by the buyer. If the finance charge or any portion thereof is calculated on the 365-day basis, the amount of the finance charge shown pursuant to item (h) shall be that amount which will be incurred by the buyer if all payments are received by the seller on their respective due dates.

title: 2. CREDIT SALES

chapter: 1. Retail Installment Sales

article: 8. Add-on Sales

path: 2. CREDIT SALES > 1. Retail Installment Sales > 8. Add-on Sales


text: Until the seller delivers to the buyer the memorandum as provided in Sections 1808.2 and 1808.3, the buyer shall be obligated to pay only the cash price of the subsequent purchase.

history: (History: Amended by Stats. 1970, Ch. 546.)

title: 2. CREDIT SALES

article: 8. Add-on Sales


text: Subject to the other provisions of Article 5 (commencing with Section 1805.1), the finance charge to be included in a consolidated total of payments under subdivision (l) of Section 1808.2 shall be determined by applying the finance charge at the applicable rate to the unpaid balance under subdivision (j) of Section 1808.2, for the period from the date of the consolidation to and including the date when the final installment of the consolidated total is payable.

history: (History: Amended (as amended by Stats. 1988, Ch. 479, Sec. 7) by Stats. 1991, Ch. 819, Sec. 11.)

title: 2. CREDIT SALES

article: 8. Add-on Sales


text: Notwithstanding any contrary provision of this title a financing agency may purchase a retail installment contract or installment account from a seller on such terms and conditions and for such price as may be mutually agreed upon. No filing of notice or of the assignment, no notice to the buyer of the assignment, and no requirement that the seller be deprived of dominion over payments upon the contract or installment account or over the goods if repossessed by the seller, shall be necessary to the validity of a written assignment of a contract or installment account as against creditors, subsequent purchasers, pledgees, mortgagees or encumbrancers of the seller, except as may otherwise be required by law.

history: (History: Added by Stats. 1959, Ch. 201.)

title: 2. CREDIT SALES

path: 2. CREDIT SALES > 1. Retail Installment Sales > 9. Terms of Purchase by Financing Agency


citation: CIV § 1810

text: For the purposes of this article, a retail installment account agreement shall be deemed to be accepted by the buyer if (1) the buyer signs the agreement, including signing an application containing the terms of the agreement, or (2) the account is used by the buyer or a person who has been authorized by the buyer to use the account, and the buyer has been notified in writing that the use of the credit card will mean that the agreement has been accepted by the buyer. The agreement shall not become effective unless and until the buyer has been given or provided with the disclosures required pursuant to Section 1810.1, and has accepted the agreement as provided in this section. A subsequent change in any term of the agreement shall not become effective until the seller has given notice of the change and complies with the provisions of subdivision (d) of Section 1810.3.

history: (History: Added by Stats. 1995, Ch. 566, Sec. 1. Effective January 1, 1996.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts

path: 2. CREDIT SALES > 1. Retail Installment Sales > 10. Retail Installment Accounts


text:
Notwithstanding any other provisions of this article to the contrary, before the first transaction is made on any retail installment account, the seller shall disclose to the buyer in a single written statement, which the buyer may retain, in terminology consistent with the requirements of Section 1810.3, each of the following items, to the extent applicable:

(a) The conditions under which a finance charge may be imposed, including an explanation of the time period, if any, within which any credit extended may be paid without incurring a finance charge.

(b) The method of determining the balance upon which a finance charge may be imposed.

(c) The method of determining the amount of the finance charge, including the method of determining any minimum, charge which may be imposed as a finance charge.

(d) Where one or more periodic rates may be used to compute the finance charge, each such rate, the range of balances to which it is applicable, and the corresponding annual percentage rate determined by multiplying the periodic rate by the number of periods in a year.

(e) The conditions under which any other charges may be imposed, and the method by which they will be determined.

(f) The conditions under which the creditor may retain or acquire any security interest in any property to secure the payment of any credit extended on the account, and a description or identification of the type of the interest or interests which may be so retained, or acquired.

(g) The minimum periodic payment required.

In addition to the penalties provided under Article 12.2 (commencing with Section 1812.6) of this chapter, until the seller delivers the written statement required by this section, the buyer shall be obligated to pay only the cash price of the goods or services.

history: (History: Amended by Stats. 1970, Ch. 546, Sec. 29.5.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: Subject to the other provisions of this article, the seller or holder of a retail installment account may charge, receive and collect a finance charge as disclosed to the buyer pursuant to Section 1810.3.

history: (History: Amended (as amended by Stats. 1988, Ch. 479, Sec. 9) by Stats. 1991, Ch. 819, Sec. 14.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text:
(a) Except in the case of an account which the seller deems to be uncollectible or with respect to which delinquency collection procedures have been instituted, the seller of any retail installment account shall mail or deliver to the buyer for each billing cycle at the end of which there is an outstanding debit balance in excess of one dollar ($1) in that account or with respect to which a finance charge is imposed, a statement or statements which the buyer may retain, setting forth in accordance with subdivision (c) each of the following items to the extent applicable:

(1) The outstanding balance in the account at the beginning of the billing cycle, using the term “previous balance.”

(2) The amount and date of each extension of credit or the date the extension of credit is debited to the account during the billing cycle and, unless previously furnished, a brief identification of any goods or services purchased or other extension of credit.

(3) The total amounts credited to the account during the billing cycle for payments, using the term “payment,” and for other credits, including returns, rebates of finance charges, and adjustments, using the term “credits,” and unless previously furnished, a brief identification of each of the items included in the other credits.

(4) The amount of any finance charge, using the term “finance charge,” debited to the account during the billing cycle, itemized and identified to show the amounts, if any, due to the application of periodic rates and the amount of any other charge included in the finance charge, such as a minimum charge, using appropriate descriptive terminology.

(5) Each periodic rate, using the term “periodic rate” (or “rates”), that may be used to compute the finance charge (whether or not applied during the billing cycle), and the range of balances to which it is applicable.

(6) The balance on which the finance charge was computed, and a statement of how that balance was determined. If any balance is determined without first deducting all credits during the billing cycle, that fact and the amount of the credits shall also be disclosed.

(7) The closing date of the billing cycle and the outstanding balance in the account on that date, using the term “new balance,” accompanied by the statement of the date by which, or the period, if any, within which, payment must be made to avoid additional finance charges.

(b) The seller shall mail or deliver the statements required by subdivision (a) at least 14 days prior to any date or the end of any time period required to be disclosed under paragraph (7) of subdivision (a) in order for the consumer to avoid an additional finance or other charge. A seller that fails to meet this requirement shall not collect any finance or other charges imposed as a result of the failure.

(c) The disclosures required by subdivision (a) may be made on the face of the periodic statement or on its reverse side. In addition, the disclosures required by subdivision (a) may be made on the periodic statement supplemented by separate statement forms if they are enclosed together and delivered to the customer at the same time and if all of the following conditions are met:

(1) The disclosures required by paragraph (1) of subdivision (a) shall appear on the face of the periodic statement. If the amounts and dates of the charges and credits required to be disclosed under paragraphs (2) and (3) of subdivision (a) are not itemized on the face or reverse side of the periodic statement, they shall be disclosed on a separate statement or separate slips which shall accompany the periodic statement and identify each charge and credit and show the date and amount thereof. Identification of goods or services purchased may be made on an accompanying slip or by symbol relating to an identification list printed on the statement. If the disclosures required under paragraph (4) of subdivision (a) are not itemized on the face or reverse side of the periodic statement, they shall be disclosed on a separate statement which shall accompany the periodic statement.

(2) The disclosures required by paragraph (5) of subdivision (a) and a reference to the amounts required to be disclosed under paragraphs (4) and (6) of subdivision (a), if not disclosed together on the face or the reverse side of the periodic statement, shall appear together on the face of a single supplemental statement which shall accompany the periodic statement.

(3) The face of the periodic statement shall contain one of the following notices, as applicable: “NOTICE: See reverse side for important information” or “NOTICE: See accompanying statement(s) for important information” or “NOTICE: See reverse side and accompanying statement(s) for important information.”

(4) The disclosures shall not be separated so as to confuse or mislead the customer, or to obscure or detract attention from the information required to be disclosed.

(d) If any change is to be made in terms of a retail installment account previously disclosed to the buyer, the seller shall mail or deliver to the buyer written disclosure of the proposed change not less than 30 days prior to the effective date of the change or 30 days prior to the beginning of the billing cycle within which the change will become effective, whichever is the earlier date. When the change involves a reduction of any component of a finance charge or other charge, the notice shall be sufficient if it appears on or accompanies the periodic statements mailed or delivered to buyers receiving periodic statements in the ordinary course of business. When the change involves an increase in any component of a finance charge, as defined in Section 1802.10, or involves a change in a charge permitted by Section 1810.4 or a change in the attorney’s fee provision in the agreement pursuant to Section 1810.4, the change shall be effective only with respect to purchases made on or after the effective date of the change.

(e) (1) If any outstanding credit balance in excess of one dollar ($1) exists in a retail installment account, the seller shall mail or deliver to the buyer at the end of the billing cycle in which the credit balance is created either of the following:

(A) A cash refund in the amount of the outstanding credit.

(B) A statement setting forth the credit balance, and thereafter shall mail or deliver to the buyer a statement setting forth the credit balance no fewer than two additional times during the six-month period following creation of the credit balance.

(2) If the credit balance exists for a period of 90 days, the seller shall, at his or her option, do either of the following:

(A) Notify the buyer of his or her right to request and receive a cash refund in the amount of the outstanding credit balance in two successive statements covering, respectively, each of the two successive billing cycles immediately following the 90-day period. The notice is to be accomplished by a clear and conspicuous disclosure on or enclosed with each of the two successive statements, each of which shall be accompanied by a self-addressed return envelope. The disclosure shall contain the following information and may be in the following form:

“We owe you ____. Your credit balance will be refunded on request. If you don’t request a refund, six months from the first appearance of a “credit balance” on your bill, your credit balance will be refunded automatically.

“If your credit balance is $1.00 or less, it will not be refunded unless requested, and after 6 months, it will not be credited against future purchases.

“You may obtain a refund of your credit balance by mail by presenting your statement at our store or by returning the top half of your statement in the enclosed envelope.”

If between the sending of the first notice and the sending of the second notice required by this subparagraph, the outstanding credit balance is refunded to the buyer or otherwise disposed of, the sending of the second notice shall not be required.

(B) Refund to the buyer the outstanding credit balance at any time after the credit balance is created in the buyer’s account and prior to the date by which the first notice of the outstanding balance would have been sent had the seller elected to proceed under subparagraph (A).

(f) (1) If a retail installment account with an outstanding credit balance in excess of one dollar ($1) which has been determined to be correct by the seller is dormant for a period of 180 days after the credit balance is created in the buyer’s account, the seller shall mail or deliver a refund in the amount of the outstanding credit balance to the buyer at the buyer’s last known address.

(2) If any refund is returned to the seller with a notification to the effect that the addressee is not located at the address to which it was sent, the seller shall make one remailing of the refund with an address correction request, and shall mail the refund to the corrected address, if it is obtained.

(3) If the refund reflecting an outstanding credit balance in excess of twenty-five dollars ($25) is again returned, the seller shall reinstate the full amount of the outstanding credit balance on the buyer’s account to be retained and credited against future purchases for one year from the date on which the remailed refund was returned. The seller may continue to attempt to obtain a current mailing address for the buyer by whatever means the seller deems appropriate. Except as provided in subdivision (g), the seller shall not be required to take any further action with respect to sending any statement of the credit balance or otherwise with respect to the credit balance, unless the buyer of the account thereafter requests a refund of the credit balance, in which event the seller shall either make the refund or provide a written explanation as provided in paragraph (5) of this subdivision.

(4) If a remailed refund reflecting an outstanding credit balance of twenty-five dollars ($25) or less is again returned, the seller, except as provided in subdivision (g), shall not be required to take any further action with respect to sending any statement of the credit balance to the buyer or otherwise with respect to the credit balance, unless the buyer of the account thereafter requests a refund of the credit balance, in which event the seller shall either make the refund or provide a written explanation as provided in paragraph (5) of this subdivision.

(5) If a buyer requests, in person or by mail, a refund of a credit balance in any amount which has been reflected at any time on the buyer’s account, the seller shall, within 30 days of receipt of the request, either refund the amount requested, or furnish the customer with a written explanation, with supporting documentation when available, of the reasons for refusing to refund the amount requested.

(6) If a buyer, in writing, requests a seller to retain an outstanding credit balance on his or her account, the seller shall not be required to give notification as otherwise required by subdivisions (e) and (f).

(g) If an outstanding credit balance remains unrefundable for three years from the date it was created in the buyer’s account, then the amount of the buyer’s outstanding credit balance shall escheat to the state as property included within Section 1520 of the Code of Civil Procedure. Those funds shall be paid or delivered to the Controller, and may thereafter be claimed, as specified in Chapter 7 (commencing with Section 1500) of Title 10 of Part 4 of the Code of Civil Procedure.

(h) For the purposes of this section, an outstanding credit balance is created at the end of the billing cycle in which the credit balance is first recorded on a buyer’s account and is created anew at the end of the billing cycle in which the recorded amount of an existing credit balance is changed because of the buyer’s use of his or her account.

history: (History: Amended by Stats. 1996, Ch. 762, Sec. 1. Effective January 1, 1997.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text:
The finance charge shall include all charges incident to investigating and making the retail installment account. No fee, expense, delinquency, collection, or other charge whatsoever shall be taken, received, reserved, or contracted by the seller or holder of a retail installment account except as provided in this section. A seller may, however, in an agreement which is accepted by the buyer and of which a copy is given or furnished to the buyer provide for the payment of attorney’s fees and costs in conformity with Article 11 (commencing with Section 1811.1). Any subsequent change in any term of the agreement shall not become effective until the seller has given notice of the change and complies with the provisions of subdivision (d) of Section 1810.3. When credit cards are issued in connection with a retail installment account, the seller, either in the agreement or after giving the notice required by subdivision (d) of Section 1810.3, may require the payment of an annual fee of not more than fifteen dollars ($15) for membership in the credit card plan, which fee shall not be deemed a finance charge or interest for any purpose of the law.

The seller or holder of a retail installment account may charge and collect a fee not to exceed fifteen dollars ($15) for the return by a depository institution of a dishonored check, negotiable order of withdrawal, or share draft issued in connection with the retail installment account. The fee is not included in charges as defined in this chapter or in determining the applicable charges which may be made under this chapter.

history: (History: Amended by Stats. 1995, Ch. 566, Sec. 3. Effective January 1, 1996.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: If the cost of any insurance is to be separately charged to the buyer, there shall be an agreement to this effect, signed by both the buyer and the seller, a copy of which shall be given or furnished to the buyer. Such agreement shall state whether the insurance is to be procured by the buyer or the seller or holder. If the insurance is to be procured by the seller or holder, the seller or holder shall comply with the provisions of Section 1803.5.

history: (History: Added by renumbering Section 1810.7 by Stats. 1969, Ch. 625.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: Nothing in this article prohibits the execution of an agreement between a buyer and seller whereby the seller retains a security interest in goods sold to the buyer until full payment therefor has been made. For purposes of release of the security interests, in the case of goods or services purchased on different dates, the first purchased shall be deemed first paid for, and in the case of goods or services purchased on the same date, the lowest priced shall be deemed first paid for, and all amounts allocated to payment of these goods or services shall be applied to accomplish that result. However, any downpayment on a specific purchase shall be deemed to be allocated in its entirety to such purchase.

history: (History: Amended by Stats. 1981, Ch. 26, Sec. 3. Effective April 30, 1981.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: No retail installment account shall require or entail the execution of any note or series of notes by the buyer which when separately negotiated will cut off as to third parties any right of action or defense which the buyer may have against the seller.

history: (History: Added by renumbering Section 1810.9 by Stats. 1969, Ch. 625.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: The provisions of Sections 1806.1 and 1806.4 shall be applicable to retail installment accounts.

history: (History: Added by renumbering Section 1810.10 by Stats. 1969, Ch. 625.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text:
(a) Notwithstanding the provision of any contract to the contrary, except as provided in subdivision (b) or (c), no retail seller shall assess any finance charge against the outstanding balance for goods purchased under a retail installment account until the goods are in the buyer’s possession.

(b) A finance charge may be assessed against the outstanding balance for such undelivered goods, as follows:

(1) From the date when such goods are available for pickup by the buyer and the buyer is notified of their availability, or

(2) From the date of purchase, when such goods are delivered or available for pickup by the buyer within 10 days of the date of purchase.

(c) In the case of a home improvement contract as defined in Section 7151.2 of the Business and Professions Code, a finance charge may be assessed against the amount financed from the approximate date of commencement of the work as set forth in the home improvement contract.

history: (History: Amended by Stats. 1979, Ch. 1000.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text:
The buyer may request, not more frequently than once a year, that the seller inform the buyer of the total amount of finance charges assessed on the account during the preceding calendar year and the seller shall provide that information to the buyer within 30 days of receiving the request, without charge.

If the buyer’s request for the information is made in writing, the seller shall provide the information in writing, provided, however, that if the seller is required to furnish the buyer with a periodic billing or periodic statement of account or furnishes the billing or statement of account, the requested statement of finance charges may be furnished along with the periodic billing or periodic statement of account.

“Seller,” for the purposes of this section, means a person engaged in the business of selling goods or furnishing services to retail buyers whose annual sales pursuant to retail installment accounts in California have exceeded one hundred fifty million dollars ($150,000,000) in the seller’s last two consecutive years.

history: (History: Repealed and added by Stats. 1995, Ch. 693, Sec. 2. Effective January 1, 1996.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text:
(a) Notwithstanding Section 1810.4, a seller or holder of a retail installment account may, subject to subdivision (d) of Section 1810.3, provide that for each installment in default the buyer shall pay a delinquency charge not in excess of one of the following amounts:

(1) For a period in default of not less than 10 days, an amount not in excess of ten dollars ($10).

(2) For a period in default of not less than 15 days, an amount not in excess of fifteen dollars ($15).

(b) Only one delinquency charge may be collected on any installment regardless of the period during which it remains in default. No delinquency charge shall be imposed for any default of payment on any payment due prior to the mailing or delivery to the buyer of the written disclosure concerning the delinquency charge provided by the seller or holder of a retail installment account pursuant to subdivision (d) of Section 1810.3. Payments timely received by the seller under a written extension or deferral agreement shall not be subject to any delinquency charge. The agreement may also provide for payment of any actual and reasonable costs of collection occasioned by removal of the goods from the state without written permission of the holder, or by the failure of the buyer to notify the holder of any change of residence, or by the failure of the buyer to communicate with the holder for a period of 45 days after any default in making payments due under the agreement.

(c) Notwithstanding subdivision (b) of Section 1810.3, the seller or holder of a retail installment account shall provide a minimum of 20 days between the monthly billing date and the date upon which the minimum payment is due, exclusive of the applicable grace period provided in subdivision (a).

history: (History: Amended by Stats. 1996, Ch. 301, Sec. 2. Effective January 1, 1997.)

title: 2. CREDIT SALES

article: 10. Retail Installment Accounts


text: This article shall be known and may be cited as the “Areias Retail Installment Account Full Disclosure Act of 1986.”

history: (History: Amended by Stats. 2000, Ch. 375, Sec. 6. Effective January 1, 2001.)

title: 2. CREDIT SALES

path: 2. CREDIT SALES > 1. Retail Installment Sales > 10.5. Retail Installment Account Credit Card Periodic Rate Disclosures


text:
(a) Any application form or preapproved written solicitation for a credit card issued in connection with a retail installment account that is mailed on or after October 1, 1987, to a retail buyer residing in this state by or on behalf of a retail seller, whether or not the retail seller is located in this state, other than an application form or solicitation included in a magazine, newspaper, or other publication distributed by someone other than the retail seller, shall contain or be accompanied by either of the following disclosures:

(1) A disclosure of each of the following, if applicable:

(A) Any periodic rate or rates that will be used to determine the finance charge imposed on the balance due under the terms of a retail installment account, expressed as an annual percentage rate or rates.

(B) Any membership or participation fee that will be imposed for availability of a retail installment account in connection with which a credit card is issued expressed as an annualized amount.

(C) If the retail seller provides a period during which the retail buyer may repay the full balance reflected on a billing statement that is attributable to purchases of goods or services from the retail seller without the imposition of additional finance charges, the retail seller shall either disclose the minimum number of days of that period, calculated from the closing date of the prior billing cycle to the date designated in the billing statement sent to the retail buyer as the date by which that payment must be received to avoid additional finance charges, or describe the manner in which the period is calculated. For purposes of this section, the period shall be referred to as the “free period” or “free-ride period.” If the retail seller does not provide this period for purchases, the disclosure shall so indicate.

(2) A disclosure that satisfies the initial disclosure statement requirements of Regulation Z (12 C.F.R. 226.6).

(b) In the event that an unsolicited application form is mailed or otherwise delivered to retail buyers in more than one state, the requirements of subdivision (a) shall be satisfied if on the application form or the soliciting material there is a notice that credit terms may vary from state to state and that provides either the disclosures required by subdivision (a) or an address or phone number for the customer to use to obtain the disclosure. The notice shall be in boldface type no smaller than the largest type used in the narrative portion, excluding headlines, of the material soliciting the application. Any person responding to the notice shall be given the disclosures required by subdivision (a).

(c) A retail seller need not present the disclosures required by paragraph (1) of subdivision (a) in chart form or use any specific terminology, except as expressly provided in this section. The following chart shall not be construed in any way as a standard by which to determine whether a retail seller who elects not to use the chart has provided the required disclosures in a manner which satisfies paragraph (1) of subdivision (a). However, disclosures shall be conclusively presumed to satisfy the requirements of paragraph (1) of subdivision (a) if a chart with captions substantially as follows is completed with the applicable terms offered by the retail seller, or if the retail seller presents the applicable terms in tabular, list, or narrative format using terminology substantially similar to the captions included in the following chart:THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO THE AREIAS RETAIL INSTALLMENT ACCOUNT FULL DISCLOSURE ACT OF 1986: CREDIT CARD TERMS VARY AMONG RETAIL SELLERS—SELECTED TERMS FOR PURCHASES UNDER THIS RETAIL INSTALLMENT ACCOUNT ARE SET OUT BELOWPERIODICRATES(as APRs)

ANNUALFEES

FREE–RIDEPERIOD(d) For purposes of this section, “Regulation Z” has the meaning attributed to it under Section 1802.18, and all of the terms used in this section have the same meaning as attributed to them in federal Regulation Z (12 C.F.R. 226.1 et seq.).

(e) Nothing in this section shall be deemed or construed to prohibit a retail seller from disclosing additional terms, conditions, or information, whether or not relating to the disclosures required under this section, in conjunction with the disclosures required by this section. Notwithstanding subdivision (g) of Section 1748.11, a retail seller that complies with the requirements of Section 1748.11 shall be deemed to have complied with the requirements of this section.

(f) If a retail seller is required under federal law to make any disclosure of the terms applicable to a retail installment account in connection with application forms or solicitations, the retail seller shall be deemed to have complied with the requirements of paragraph (1) of subdivision (a) with respect to those application forms or solicitations if the retail seller complies with the federal disclosure requirement.

(g) If the disclosure required by this section does not otherwise appear on an application form or an accompanying retail installment agreement distributed in this state on or after October 1, 1987, other than by mail, the application form shall include a statement in substantially the following form:

“If you wish to receive disclosure of the terms of this retail installment account, pursuant to the Areias Retail Installment Account Full Disclosure Act of 1986, check here and return to the address on this form.”

A box shall be printed in or next to this statement for placing such a checkmark.

(h) This article does not apply to (1) any application form or preapproved written solicitation for a retail installment account credit card where the credit to be extended will be secured by a lien on real or personal property, or both real and personal property, (2) any application form or written solicitation that invites a person or persons to apply for a retail installment account credit card and which is included as part of a catalog which is sent to one or more persons by a creditor in order to facilitate a credit sale of goods offered in the catalog, (3) any advertisement which does not invite, directly or indirectly, an application for a retail installment account credit card, and (4) any application form or written advertisement included in a magazine, newspaper, or other publication distributed in more than one state by someone other than the creditor.

history: (History: Amended by Stats. 2001, Ch. 159, Sec. 34. Effective January 1, 2002.)

title: 2. CREDIT SALES

article: 10.5. Retail Installment Account Credit Card Periodic Rate Disclosures


text: Reasonable attorney’s fees and costs shall be awarded to the prevailing party in any action on a contract or installment account subject to the provisions of this chapter regardless of whether such action is instituted by the seller, holder or buyer. Where the defendant alleges in his answer that he tendered to the plaintiff the full amount to which he was entitled, and thereupon deposits in court, for the plaintiff, the amount so tendered, and the allegation is found to be true, then the defendant is deemed to be a prevailing party within the meaning of this article.

history: (History: Amended by Stats. 1961, Ch. 1214.)

title: 2. CREDIT SALES

article: 11. Attorney’s Fees and Court Costs

path: 2. CREDIT SALES > 1. Retail Installment Sales > 11. Attorney’s Fees and Court Costs


text: In the event of any default by the buyer in the performance of his obligations under a contract or installment account, the holder, pursuant to any rights granted therein, may proceed to recover judgment for the balance due without retaking the goods, or he may retake the goods and proceed as hereinafter provided. If he retakes the goods, he shall, within 10 days, give notice to the buyer of his intention to sell the goods at public sale or give notice to the buyer of his intention to retain the goods in satisfaction of the balance due. The notice must state the amount of the overdue payments, that the buyer must pay, if he pays within 10 days of the notice, in order to redeem the goods. In either case the buyer shall have an absolute right to redeem the goods within 10 days after the notice is given by paying or tendering the amount owing under the contract. If the holder gives notice of election to sell the goods the buyer shall also have the absolute right to redeem the goods at any time before sale by paying or tendering the amounts specified above and also any expense reasonably incurred by the seller or holder in good faith in repairing, reconditioning the goods or preparing them for sale. If the holder gives notice of his intention to retain the goods in satisfaction of the indebtedness he shall be deemed to have done so at the end of the 10-day period if the goods are not redeemed; at the time the notice is given, the holder shall furnish the buyer a written statement of the sum due under the contract and the expenses provided for in this section. For failure to render such a statement the holder shall forfeit to the buyer ten dollars ($10) and also be liable to him for all damages suffered because of such failure.

history: (History: Amended by Stats. 1963, Ch. 1952.)

title: 2. CREDIT SALES

article: 12.1. Repossession and Resale

path: 2. CREDIT SALES > 1. Retail Installment Sales > 12.1. Repossession and Resale


text: The notice provided for in Section 1812.2 shall be given to the buyer and any other person liable by causing it to be delivered personally or to be deposited in the United States mail addressed to the buyer or to such other person at his last known address and shall advise the buyer or such other person of his right to redeem as provided for in Section 1812.2. If the holder determines to sell the goods at public sale he shall give notice of the time and place of sale at least 10 days before the date of sale by delivering a copy of the notice personally to the buyer or other person liable or depositing the same in the United States mail addressed to the buyer or such other person at his last known address.

title: 2. CREDIT SALES

article: 12.1. Repossession and Resale


text: The proceeds of a resale shall be applied (1) to the payment of the expenses thereof, (2) to the payment of any expenses of retaking, including reasonable attorney’s fees actually incurred, and of any expenses of keeping, storing, repairing, reconditioning or preparing the goods for sale to which the holder may be entitled, (3) to the satisfaction of the balance due under the contract. Any sum remaining after the satisfaction of such claims shall be paid to the buyer.

history: (History: Added by Stats. 1959, Ch. 201.)

title: 2. CREDIT SALES

article: 12.1. Repossession and Resale


text: If the proceeds of the sale are not sufficient to cover items (1), (2) and (3) of Section 1812.4, the holder may not recover the deficiency from the buyer or from anyone who has succeeded to the obligations of the buyer.

title: 2. CREDIT SALES

article: 12.1. Repossession and Resale


text: Any person who shall willfully violate any provision of this chapter shall be guilty of a misdemeanor.

title: 2. CREDIT SALES

article: 12.2. Penalties

path: 2. CREDIT SALES > 1. Retail Installment Sales > 12.2. Penalties


text: In case of failure by any person to comply with the provisions of this chapter, such person or any person who acquires a contract or installment account with knowledge of such noncompliance is barred from recovery of any finance charge or of any delinquency, collection, extension, deferral or refinance charge imposed in connection with such contract or installment account and the buyer shall have the right to recover from such person an amount equal to any of such charges paid by the buyer.

history: (History: Amended by Stats. 1970, Ch. 546.)

title: 2. CREDIT SALES

article: 12.2. Penalties


text: Notwithstanding the provisions of this article, any failure to comply with any provision of this chapter may be corrected by the holder in accordance with the provisions of this section, provided that a willful violation may not be corrected, and a correction which will increase the amount owed by the buyer or the amount of any payment shall not be effective unless the buyer concurs in writing to the correction. If a violation is corrected by the holder in accordance with the provisions of this section, neither the seller nor the holder shall be subject to any penalty under this article. The correction shall be made by delivery to the buyer of a corrected copy of the contract within 30 days of the execution of the original contract by the buyer. Any amount improperly collected from the buyer shall be credited against the indebtedness evidenced by the contract.

title: 2. CREDIT SALES

article: 12.2. Penalties


text: In any case in which a person willfully violates any provision of this chapter in connection with the imposition, computation or disclosures of or relating to a finance charge on a consolidated total of two or more contracts under the provisions of Article 8 (commencing with Section 1808.1) of this chapter, the buyer may recover from such person an amount equal to three times the total of the finance charges and any delinquency, collection, extension, deferral or refinance charges imposed, contracted for or received on all contracts included in the consolidated total and the seller shall be barred from the recovery of any such charges.

title: 2. CREDIT SALES

article: 12.2. Penalties


text:
(a) An action on a contract or installment account under this chapter shall be tried in the superior court in the county where the contract was in fact signed by the buyer, where the buyer resided at the time the contract was entered into, where the buyer resides at the commencement of the action, or where the goods purchased pursuant to the contract have been so affixed to real property as to become a part of that real property.

(b) In the superior court designated as the proper court in subdivision (a), the proper court location for trial of an action under this chapter is the location where the court tries that type of action that is nearest or most accessible to where the contract was in fact signed by the buyer, where the buyer resided at the time the contract was entered into, where the buyer resides at the commencement of the action, or where the goods purchased pursuant to the contract have been so affixed to real property as to become a part of that real property. Otherwise, any location of the superior court designated as the proper court in subdivision (a) is the proper court location for the trial of the action. The court may specify by local rule the nearest or most accessible court location where the court tries that type of case.

(c) In any action subject to this section, concurrently with the filing of the complaint, the plaintiff shall file an affidavit stating facts showing that the action has been commenced in a superior court and court location described in this section as a proper place for the trial of the action. Those facts may be stated in a verified complaint and shall not be stated on information or belief. When that affidavit is filed with the complaint, a copy thereof shall be served with the summons. If a plaintiff fails to file the affidavit or state facts in a verified complaint required by this section, no further proceedings may occur, but the court shall, upon its own motion or upon motion of any party, dismiss the action without prejudice. The court may, on terms that are just, permit the affidavit to be filed subsequent to the filing of the complaint and a copy of the affidavit shall be served on the defendant. The time to answer or otherwise plead shall date from that service.

history: (History: Amended by Stats. 2002, Ch. 806, Sec. 1. Effective January 1, 2003.)

title: 2. CREDIT SALES

article: 12.3. Actions

path: 2. CREDIT SALES > 1. Retail Installment Sales > 12.3. Actions


text: Notwithstanding Section 1801.6, no person shall require a purchaser of goods or services to obtain financing from any particular source. Any person who violates this section shall be subject to the penalty provided in Section 1812.6.

history: (History: Added by Stats. 1979, Ch. 1151.)

title: 2. CREDIT SALES

article: 12.4. Financing Retail Purchases

path: 2. CREDIT SALES > 1. Retail Installment Sales > 12.4. Financing Retail Purchases


text:
(a) No person, regardless of marital status, shall be denied credit in his or her own name if the earnings and other property over which he or she has management and control are such that a person of the opposite sex managing and controlling the same amount of earnings and other property would receive credit.

(b) No person, regardless of marital status, managing and controlling earnings and other property shall be offered credit on terms less favorable than those offered to a person of the opposite sex seeking the same type of credit and managing and controlling the same amount of earnings and other property.

(c) No unmarried person shall be denied credit if his or her earnings and other property are such that a married person managing and controlling the same amount of earnings and other property would receive credit.

(d) No unmarried person shall be offered credit on terms less favorable than those offered to a married person managing and controlling the same amount of earnings and other property.

(e) For accounts established after January 1, 1977 or for accounts in existence on January 1, 1977 where information on that account is received after January 1, 1977, a credit reporting agency which in its normal course of business receives information on joint credit accounts identifying the persons responsible for such accounts, or receives information which reflects the participation of both spouses, shall: (1) at the time such information is received file such information separately under the names of each person or spouse, or file such information in another manner which would enable either person or spouse to automatically gain access to the credit history without having in any way to list or refer to the name of the other person, and (2) provide access to all information about the account in the name of each person or spouse.

(f) For all accounts established prior to January 1, 1977, a credit reporting agency shall at any time upon the written or personal request of a person who is or has been married, verify the contractual liability, liability by operation of law, or authorized use by such person, of joint credit accounts appearing in the file of the person’s spouse or former spouse, and, if applicable, shall file such information separately and thereafter continue to do so under the names of each person responsible for the joint account or in another manner which would enable either person responsible for the joint account to automatically gain access to the credit history without having in any way to list or refer to the name of the other person.

(g) For the purposes of this chapter “credit” means obtainment of money, property, labor, or services on a deferred-payment basis.

(h) For the purposes of this chapter, earnings shall include, but not be limited to, spousal, family, and child support payments, pensions, social security, disability or survivorship benefits. Spousal, family, and child support payments shall be considered in the same manner as earnings from salary, wages, or other sources where the payments are received pursuant to a written agreement or court decree to the extent that the reliability of such payments is established. The factors which a creditor may consider in evaluating the reliability of such payments are the length of time payments have been received; the regularity of receipt; and whether full or partial payments have been made.

(i) Nothing in this chapter shall be construed to prohibit a person from: (1) utilizing an evaluation of the reliability of earnings provided that such an evaluation is applied to persons without regard to their sex or marital status; or (2) inquiring into and utilizing an evaluation of the obligations for which community property is liable pursuant to the Family Code for the sole purpose of determining the creditor’s rights and remedies with respect to the particular extension of credit, provided that such is done with respect to all applicants without regard to their sex; or (3) utilizing any other relevant factors or methods in determining whether to extend credit to an applicant provided that such factors or methods are applicable to all applicants without regard to their sex or marital status. For the purpose of this subdivision, the fact that an applicant is of childbearing age is not a relevant factor.

(j) Credit applications for the obtainment of money, goods, labor, or services shall clearly specify that the applicant, if married, may apply for a separate account.

history: (History: Amended by Stats. 1992, Ch. 163, Sec. 11. Effective January 1, 1993. Operative January 1, 1994, by Sec. 161 of Ch. 163.)

title: 2. CREDIT SALES

chapter: 2. Credit Transactions Regarding Women

path: 2. CREDIT SALES > 2. Credit Transactions Regarding Women


text:
(a) Whoever violates Section 1812.30 shall be liable to the aggrieved person in an amount equal to the sum of any actual damages sustained by such person acting either in an individual capacity or as a representative of a class.

(b) Whoever violates Section 1812.30 shall be liable to the aggrieved person for punitive damages in an amount not greater than ten thousand dollars ($10,000), as determined by the court, in addition to any actual damages provided in subdivision (a); provided, however, that in pursuing the recovery allowed under this subdivision, the aggrieved person may proceed only in an individual capacity and not as a representative of a class.

(c) Notwithstanding subdivision (b), whoever violates Section 1812.30 may be liable for punitive damages in the case of a class action in such amount as the court may allow, except that as to each member of the class no minimum recovery shall be applicable, and the total recovery in such action shall not exceed the lesser of one hundred thousand dollars ($100,000) or one percent (1%) of the net worth of the creditor. In determining the amount of the award in any class action, the court shall consider, among other relevant factors, the amount of any actual damages awarded, the frequency and persistence of violations, the resources of the creditor, the number of persons adversely affected, and the extent to which the creditor’s violation was intentional.

history: (History: Amended by Stats. 1975, Ch. 332.)

title: 2. CREDIT SALES


text: Any person, corporation, firm, partnership, joint stock company, or any other association or organization which violates or proposes to violate this chapter may be enjoined by any court of competent jurisdiction. Actions for injunction under this section may be prosecuted by the Attorney General or any district attorney, county counsel, city attorney, or city prosecutor in this state in the name of the people of the State of California or by any person denied credit or offered credit in violation of Section 1812.30.

history: (History: Added by Stats. 1975, Ch. 332.)

title: 2. CREDIT SALES


text:
(a) Any person who intentionally violates any injunction issued pursuant to this chapter shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each day that such person violates the injunction.

(b) The civil penalty prescribed by this section shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General or by any district attorney, county counsel, or city attorney in any court of competent jurisdiction. An action brought pursuant to this section to recover such civil penalties shall take special precedence over all civil matters on the calendar of the court except those matters to which equal precedence on the calendar is granted by law.

(c) If such an action is brought by the Attorney General, one-half of the penalty collected pursuant to this section shall be paid to the treasurer of the county in which the judgment was entered, and one-half to the State Treasurer. If brought by a district attorney or county counsel, the entire amount of the penalty collected shall be paid to the treasurer of the county in which the judgment was entered. If brought by a city attorney or city prosecutor, one-half of the penalty shall be paid to the treasurer of the county in which the judgment was entered and one-half to the city.

title: 2. CREDIT SALES


text: Any person denied credit or offered credit in violation of Section 1812.30 who brings an action pursuant to Section 1812.31 or 1812.32 of this code may petition the court for award of costs and reasonable attorney’s fees which the court shall award if the action is successful.

title: 2. CREDIT SALES


text: Any action commenced pursuant to Section 1812.31 shall be commenced within two years from the date on which the person is denied credit or is offered credit in violation of Section 1812.30.

title: 2. CREDIT SALES


text:
(a) The Legislature finds that there exists in connection with a substantial number of contracts for dance studio lessons and other services, sales practices, and business and financing methods which have worked a fraud, deceit, imposition, and financial hardship upon the people of this state; that existing legal remedies are inadequate to correct these abuses; that the dance studio industry has a significant impact upon the economy and well-being of this state and its local communities; and that the provisions of this title relating to these contracts are necessary for the public welfare.

(b) The Legislature declares that the purpose of this title is to safeguard the public against fraud, deceit, imposition, and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of dance studio lessons and other services by prohibiting or restricting false or misleading advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive, destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured in connection with contracts for dance studio lessons and other services.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 2.)

title: 2.4. CONTRACTS FOR DANCE STUDIO LESSONS AND OTHER SERVICES


text: As used in this title, “contract for dance studio lessons and other services” means a contract for instruction in ballroom or other types of dancing, and includes lessons and other services, whether given to students individually or in groups. This title does not include contracts for professional services rendered or furnished by a person licensed under Division 2 (commencing with Section 500) of the Business and Professions Code, or contracts for instruction at schools operating pursuant to the Education Code.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 3.)

path: 2.4. CONTRACTS FOR DANCE STUDIO LESSONS AND OTHER SERVICES


text: Every contract for dance studio lessons and other services shall be in writing and shall be subject to this title. A copy of the written contract shall be given to the customer at the time he or she signs the contract.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 5.)


text:
(a) No contract for dance studio lessons and other services shall require payments or financing by the buyer over a period in excess of one year from the date the contract is entered into, nor shall the term of any contract be measured by the life of the buyer. However, the lessons and other services to be rendered to the buyer under the contract may extend over a period not to exceed seven years from the date the contract is entered into.

(b) All contracts for dance studio lessons and other services that may be in effect between the same seller and the same buyer, the terms of which overlap for any period, shall be considered as one contract for the purposes of this title.

history: (History: Amended by Stats. 1999, Ch. 1024, Sec. 1. Effective January 1, 2000.)


text:
(a) Every contract for dance studio lessons and other services shall provide that performance of the agreed-upon lessons will begin within six months from the date the contract is entered into.

(b) A contract for dance studio lessons and other services may be canceled by the student at any time provided he or she gives written notice to the dance studio at the address specified in the contract. When a contract for dance studio lessons and other services is canceled the dance studio shall calculate the refund on the contract, if any, on a pro rata basis. The dance studio shall refund any moneys owed to the student within 10 days of receiving the cancellation notice, unless the student owes the dance studio money for studio lessons or other services received prior to the cancellation, in which case any moneys owed the dance studio shall be deducted by the dance studio from the refund owed to the student and the balance, if any, shall be refunded as specified above. A dance studio shall not charge a cancellation fee, or other fee, for cancellation of the contract by the student.

(c) Every contract for dance studio lessons and other services shall contain a written statement of the hourly rate charged for each type of lesson for which the student has contracted. If the contract includes dance studio lessons that are sold at different per-hour rates, the contract shall contain separate hourly rates for each different type of lesson sold. All other services for which the student has contracted that are not capable of a per-hour charge shall be set forth in writing in specific terms. The statement shall be contained in the dance studio contract before the contract is signed by the buyer.

(d) Every dance studio subject to Sections 1812.64 and 1812.65 shall include in every contract for dance studio lessons or other services a statement that the studio is bonded and that information concerning the bond may be obtained by writing to the office of the Secretary of State.

history: (History: Amended by Stats. 1999, Ch. 1024, Sec. 2. Effective January 1, 2000.)


text: No contract for dance studio lessons and other services shall require or entail the execution of any note or series of notes by the buyer which, when separately negotiated, will cut off as to third parties any right of action or defense which the buyer may have against the seller.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 8.)


text: No right of action or defense arising out of a contract for dance studio lessons and other services which the buyer has against the seller, and which would be cut off by assignment, shall be cut off by assignment of the contract to any third party whether or not he or she acquires the contract in good faith and for value unless the assignee gives notice of the assignment to the buyer as provided in this section and, within 30 days of the mailing of notice, receives no written notice of the facts giving rise to the claim or defense of the buyer. A notice of assignment shall be in writing addressed to the buyer at the address shown on the contract and shall identify the contract and inform the buyer that he or she shall, within 30 days of the date of mailing of the notice, notify the assignee in writing of any facts giving rise to a claim or defense which he or she may have. The notice of assignment shall state the name of the seller and buyer, a description of the lessons and other services, the contract balance, and the number and amount of the installments.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 9.)


text:
(a) Every contract for dance studio lessons and other services shall contain a clause providing that if, by reason of death or disability, the person agreeing to receive lessons and other services is unable to receive all lessons and other services for which he or she has contracted, the person and his or her estate shall be relieved from the obligation of making payment for lessons and other services other than those received prior to death or the onset of disability, and that if the buyer has prepaid any sum for lessons and other services so much of that sum as is allocable to lessons and other services he or she has not taken shall be promptly refunded to the buyer or his or her representative.

(b) Notwithstanding the provisions of any contract to the contrary, whenever the contract price is payable in installments and the buyer is relieved from making further payments or entitled to a refund under this section, the buyer shall be entitled to receive a refund or refund credit of so much of the cash price as is allocable to the lessons or other services not actually received by the buyer. The refund of the finance charge shall be computed according to the “sum of the balances method,” also known as the “Rule of 78”.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 10.)


text: The provisions of this title are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with all other applicable provisions of law.

history: (History: Added by Stats. 1969, Ch. 1571.)


text: Any contract for dance studio lessons and other services which does not comply with the applicable provisions of this title shall be void and unenforceable as contrary to public policy.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 11.)


text: Any contract for dance studio lessons and other services entered into in reliance upon any willful and false, fraudulent, or misleading information, representation, notice, or advertisement of the seller shall be void and unenforceable.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 12.)


text: Any waiver of the buyer of the provisions of this title shall be deemed contrary to public policy and shall be void and unenforceable.


text:
(a) Any buyer injured by a violation of this title may bring an action for the recovery of damages. Judgment may be entered for three times the amount at which the actual damages are assessed plus reasonable attorney fees.

(b) Notwithstanding the provisions of this title, any failure to comply with any provision of this title may be corrected within 30 days after the execution of the contract by the buyer, and, if so corrected, neither the seller nor the holder shall be subject to any penalty under this title, provided that any correction which increases any monthly payment, the number of payments, or the total amount due, must be concurred in, in writing, by the buyer. “Holder” includes the seller who acquires the contract, or, if the contract is purchased by a financing agency or other assignee, the financing agency or other assignee.


text:
Any person who violates any provision of this title relating to dance studio contracts is guilty of a misdemeanor. Any superior court of this state has jurisdiction in equity to restrain and enjoin the violation of any of the provisions of this title relating to dance studio contracts.

The duty to institute actions for violation of those provisions of this title, including equity proceedings to restrain and enjoin violations, is hereby vested in the Attorney General, district attorneys, and city attorneys. The Attorney General, any district attorney, or any city attorney may prosecute misdemeanor actions or institute equity proceedings, or both.

This section shall not be deemed to prohibit the enforcement by any person of any right provided by this or any other law.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 13.)


text:
Every dance studio shall maintain a bond issued by a surety company admitted to do business in this state. The principal sum of the bond shall be 25 percent of the dance studio’s gross income from the studio business in this state during the studio’s last fiscal year, except that the principal sum of the bond shall not be less than twenty-five thousand dollars ($25,000) in the first or any subsequent year of operation.

A copy of the bond shall be filed with the Secretary of State, together with a declaration under penalty of perjury signed by the owner of the studio stating the dance studio’s gross income from the dance studio business in this state during the last fiscal year. The information contained in the declaration shall not be subject to public inspection. If the person in whose name the bond is issued severs his or her relationship with the bonded dance studio, the new owner shall, as a condition of doing business, notify the Secretary of State of the change of ownership and of proof of compliance with Sections 1812.64 and 1812.65.

history: (History: Amended by Stats. 1999, Ch. 1024, Sec. 3. Effective January 1, 2000.)


text: The bond required by Section 1812.64 shall be in favor of the State of California for the benefit of any person who, after entering into a contract for dance studio lessons and other services with the dance studio, is damaged by fraud or dishonesty or failure to provide the services of the studio in performance of the contract.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 15.)


text:
(a) Sections 1812.64 and 1812.65 do not apply to any dance studio which requires or receives less than fifty dollars ($50) in advance payments from or on behalf of each student for dance studio lessons or other services which are to be rendered by the studio in the future and such advance payments are not required or received by the studio from each student more frequently than once every 30 days.

(b) Sections 1812.53, 1812.54, 1812.64, and 1812.65 do not apply to a dance studio which only offers instruction in ballet, modern, jazz, tap dance, or any combination thereof, to persons under 21 years of age pursuant to a contract for dance studio lessons that provides all of the following: (1) a total payment of less than five hundred dollars ($500), (2) that all agreed-upon lessons will be offered within four months from the date the contract is entered, and (3) that the contract may be canceled and all money paid for instruction not yet received will be refunded within 10 days of cancellation, if the dance student cancels within three days after receiving the first lesson, or if the dance student cancels at any time after moving his or her residence to a location more than 15 miles from the location of the dance studio.

(c) Sections 1812.53, 1812.54, 1812.64, and 1812.65 do not apply to any organization that has qualified for a tax exemption under Section 501(c)(3) of the Internal Revenue Code and which receives a direct grant of funds from the California Arts Council.

history: (History: Amended by Stats. 1988, Ch. 1043, Sec. 16.)


text: If any provision of this title or the application thereof to any person or circumstances is held unconstitutional, the remainder of the title and the application of such provision to other persons and circumstances shall not be affected thereby.


text:
(a) The Secretary of State shall enforce the provisions of this title that govern the filing and maintenance of bonds.

(b) The Secretary of State shall charge a filing fee not to exceed the cost of filing the bond.

history: (History: Amended by Stats. 1999, Ch. 1024, Sec. 5. Effective January 1, 2000.)


text:
(a) The Legislature finds that the health studio industry has a significant impact upon the economy and well-being of this state and its local communities; and that the provisions of this title relating to contracts for health studio services are necessary for the public welfare.

(b) The Legislature declares that the purpose of this title is to safeguard the public against fraud, deceit, imposition and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of health studio services by prohibiting or restricting false or misleading advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive, destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured in connection with contracts for health studio services.

history: (History: Amended by Stats. 2005, Ch. 439, Sec. 1. Effective January 1, 2006.)

title: 2.5. CONTRACTS FOR HEALTH STUDIO SERVICES


text: As used in this title, “contract for health studio services” means a contract for instruction, training or assistance in physical culture, body building, exercising, reducing, figure development, or any other such physical skill, or for the use by an individual patron of the facilities of a health studio, gymnasium or other facility used for any of the above purposes, or for membership in any group, club, association or organization formed for any of the above purposes; but does not include (a) contracts for professional services rendered or furnished by a person licensed under the provisions of Division 2 (commencing with Section 500) of the Business and Professions Code, (b) contracts for instruction at schools operating pursuant to the provisions of the Education Code, or (c) contracts for instruction, training, or assistance relating to diet or control of eating habits not involving physical culture, body building, exercising, figure development, or any other such physical skill.

history: (History: Amended by Stats. 1980, Ch. 690, Sec. 1.)

path: 2.5. CONTRACTS FOR HEALTH STUDIO SERVICES


text: Every contract for health studio services shall be in writing and shall be subject to the provisions of this title. A copy of the written contract shall be physically given to or delivered by email to the customer at the time he or she signs the contract.

history: (History: Amended by Stats. 2016, Ch. 189, Sec. 1. (AB 2810) Effective January 1, 2017.)


text: All contracts for health studio services, which may be in effect between the same seller and the same buyer, the terms of which overlap for any period, shall be considered as one contract for the purposes of this title.

history: (History: Amended by Stats. 1969, Ch. 1571.)


text:
(a) A contract for health studio services may not require payments or financing by the buyer to exceed the term of the contract, nor may the term of the contract exceed three years. This subdivision does not apply to a member’s obligation to pay valid, outstanding moneys due under the contract, including moneys to be paid pursuant to a termination notice period in the contract in which the termination notice period does not exceed 30 days.

(b) A contract for health studio services shall include a statement printed in a size at least 14-point type or presented in an equally legible electronic format that discloses the initial or minimum length of the term of the contract. This statement shall be placed above the space reserved for the signature of the buyer.

(c) At any time a cancellation is authorized by this title, a contract for health studio services may be canceled by the buyer in person, via email from an email address on file with the health studio, or via first-class mail.

history: (History: Amended by Stats. 2016, Ch. 189, Sec. 2. (AB 2810) Effective January 1, 2017.)


text:
(a) Every contract for health studio services shall provide that performance of the agreed-upon services will begin within six months after the date the contract is entered into. The consumer may cancel the contract and receive a pro rata refund if the health studio fails to provide the specific facilities advertised or offered in writing by the time indicated. If no time is indicated in the contract, the consumer may cancel the contract within six months after the execution of the contract and shall receive a pro rata refund. If a health studio fails to meet a timeline set forth in this section, the consumer may cancel the contract at any time after the expiration of the timeline. However, if following the expiration of the timeline, the health studio provides the advertised or agreed-upon services, the consumer may cancel the contract up to 10 days after those services are provided.

(b) (1) Every contract for health studio services shall, in addition, contain on its face, and in close proximity to the space reserved for the signature of the buyer, a conspicuous statement in a size equal to at least 10-point boldface type, as follows:

“You, the buyer, may choose to cancel this agreement at any time prior to midnight of the fifth business day of the health studio after the date of this agreement, excluding Sundays and holidays. To cancel this agreement, mail, email, or deliver a signed and dated notice that states that you, the buyer, are canceling this agreement, or words of similar effect. The notice shall be sent via first-class mail, via email from an email address on file with the health studio, or delivered in person to(Name of health studio operator)at (Address and email address of health studio operator).”(2) The contract for health studio services shall contain on the first page, in a type size no smaller than that generally used in the body of the document, the following: (A) the name and mailing address of the health studio operator to which the notice of cancellation is to be mailed, (B) the email address of the health studio operator to which a notice of cancellation email is to be sent, and (C) the date the buyer signed the contract.

(3) The contract shall provide a description of the services, facilities, and hours of access to which the consumer is entitled or state where that information is available on the health studio operator’s Internet Web site. Any services, facilities, and hours of access that are not described in the contract or on the health studio operator’s Internet Web site shall be considered optional services, and these optional services shall be considered as separate contracts for the purposes of this title and Section 1812.83.

(4) Until the health studio operator has complied with this section, the buyer may cancel the contract for health studio services.

(5) All moneys paid pursuant to a contract for health studio services shall be refunded within 10 days after receipt of the notice of cancellation, except that payment shall be made for any health studio services received prior to cancellation.

(c) If at any time during the term of the contract, including a transfer of the contractual obligation, the health studio eliminates or substantially reduces the scope of the facilities, such as swimming pools or tennis courts, that were described in the contract, in an advertisement relating to the specific location, or in a written offer, and available to the consumer upon execution of the contract, the consumer may cancel the contract and receive a pro rata refund. The consumer may not cancel the contract pursuant to this subdivision if the health studio, after giving reasonable notice to its members, temporarily takes facilities out of operation for reasonable repairs, modifications, substitutions, or improvements. This subdivision shall not be interpreted to give the consumer the right to cancel a contract because of changes to the type or quantity of classes or equipment offered, provided the consumer is informed in the contract that the health studio reserves the right to make changes to the type or quantity of classes or equipment offered and the changes to the type or quantity of classes or equipment offered are reasonable under the circumstances.

(d) (1) If a contract for health studio services requires payment of one thousand five hundred dollars ($1,500) to two thousand dollars ($2,000), inclusive, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 20 days after the contract is executed.

(2) If a contract for health studio services requires payment of two thousand one dollars ($2,001) to two thousand five hundred dollars ($2,500), inclusive, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 30 days after the contract is executed.

(3) If a contract for health studio services requires payment of two thousand five hundred one dollars ($2,501) or more, including initiation fees or initial membership fees, by the person receiving the services or the use of the facility, the person shall have the right to cancel the contract within 45 days after the contract is executed.

(4) The right of cancellation provided in this subdivision shall be set out in the membership contract.

(5) The rights and remedies under this paragraph are cumulative to any rights and remedies under other law.

(6) A health studio entering into a contract for health studio services that requires a payment of less than one thousand five hundred dollars ($1,500), including initiation or initial membership fees and exclusive of interest or finance charges, by the person receiving the services or the use of the facilities, is not required to comply with paragraph (1), (2), or (3).

(e) Upon cancellation, the consumer shall be liable only for that portion of the total contract payment, including initiation fees and other charges however denominated, that has been available for use by the consumer, based upon a pro rata calculation over the term of the contract. The remaining portion of the contract payment shall be returned to the consumer by the health studio.

history: (History: Amended by Stats. 2016, Ch. 189, Sec. 3. (AB 2810) Effective January 1, 2017.)


text:
(a) No contract for health studio services shall require payment by the person receiving the services or the use of the facilities of a total amount in excess of the amount specified in subdivision (b) or (c).

(b) The limit specified in subdivision (a) shall, on and after January 1, 2006, be three thousand dollars ($3,000), inclusive of initiation or initial membership fees and exclusive of interest or finance charges.

(c) The limit in subdivision (a) shall, on and after January 1, 2010, be four thousand four hundred dollars ($4,400), inclusive of initiation or initial membership fees and exclusive of interest or finance charges.

history: (History: Amended by Stats. 2005, Ch. 439, Sec. 4. Effective January 1, 2006.)


text: No contract for health studio services shall require or entail the execution of any note or series of notes by the buyer which when separately negotiated will cut off as to third parties any right of action or defense which the buyer may have against the seller.


text: No right of action or defense arising out of a contract for health studio services which the buyer has against the seller, and which would be cut off by assignment, shall be cut off by assignment of the contract to any third party whether or not he acquires the contract in good faith and for value unless the assignee gives notice of the assignment to the buyer as provided in this section and within 30 days of the mailing of notice receives no written notice of the facts giving rise to the claim or defense of the buyer. A notice of assignment shall be in writing addressed to the buyer at the address shown on the contract and shall identify the contract and inform the buyer that he must, within 30 days of the date of mailing of the notice, notify the assignee in writing of any facts giving rise to a claim or defense which he may have. The notice of assignment shall state the name of the seller and buyer, a description of the services, the contract balance and the number and amount of the installments.


text:
(a) (1) Every contract for health studio services shall contain a clause providing that if, by reason of death or disability, the person agreeing to receive services is unable to receive all services for which he has contracted, he and his estate shall be relieved from the obligation of making payment for services other than those received prior to death or the onset of disability, and that if he has prepaid any sum for services, so much of such sum as is allocable to services he has not taken shall be promptly refunded to him or his representative.

(2) In every case in which a person has prepaid a sum for services under a contract for health studio services, and by reason of death or disability, is unable to receive all such services, the party agreeing to furnish such services shall, on request, immediately refund to such person or his personal representative such amount of the sum prepaid as is proportionate to the amount of services not received.

(3) For the purposes of this section, “disability” means a condition which precludes the buyer from physically using the facilities and the condition is verified by a physician.

(4) Notwithstanding the provisions of any contract to the contrary, whenever the contract price is payable in installments and the buyer is relieved from making further payments or entitled to a refund under this section, the amount of the contract price allocable to services not received shall represent at least as great a proportion of the total contract price as the sum of the periodic monthly balances not yet due bears to the sum of all the periodic monthly balances under the schedule of installments in the contract.

(b) (1) Except as provided in paragraph (2), every contract for health studio services shall contain a clause providing that if the person agreeing to receive health studio services moves further than 25 miles from the health studio and is unable to transfer the contract to a comparable facility, such person shall be relieved from the obligation of making payment for services other than those received prior to the move, and if such person has prepaid any sum for health studio services, so much of such sum as is allocable to services he or she has not taken shall be promptly refunded.

(2) Notwithstanding paragraph (1), a contract for health studio services may contain a clause providing that if the person agreeing to receive health studio services moves further than 25 miles from the health studio and is unable to transfer the contract to a comparable facility, such person may be charged a predetermined fee not exceeding one hundred dollars ($100), or, if more than half the life of the contract has expired, such person may be charged a predetermined fee not exceeding fifty dollars ($50).

history: (History: Amended by Stats. 1980, Ch. 651, Sec. 4.)


text: The provisions of this title are not exclusive and do not relieve the parties or the contracts subject thereto from compliance with all other applicable provisions of law.

history: (History: Added by Stats. 1961, Ch. 1675.)


text: Any contract for health studio services which does not comply with the applicable provisions of this title shall be void and unenforceable as contrary to public policy.


text: Any contract for health studio services entered into in reliance upon any willful and false, fraudulent, or misleading information, representation, notice or advertisement of the seller shall be void and unenforceable.


text: Any waiver of the buyer of the provisions of this title shall be deemed contrary to public policy and shall be void and unenforceable.


text:
(a) Any buyer injured by a violation of this title may bring an action for the recovery of damages. Judgment may be entered for three times the amount at which the actual damages are assessed plus reasonable attorney fees.

(b) Notwithstanding the provisions of this title, any failure to comply with any provision of this title may be corrected within 30 days after the execution of the contract by the buyer, and, if so corrected, neither the seller nor the holder shall be subject to any penalty under this title, provided that any correction which increases any monthly payment, the number of payments, or the total amount due, must be concurred in, in writing, by the buyer. “Holder” includes the seller who acquires the contract or, if the contract is purchased by a financing agency or other assignee, the financing agency or other assignee.

history: (History: Amended by Stats. 1963, Ch. 299.)


text: If any provision of this title or the application thereof to any person or circumstances is held unconstitutional, the remainder of the title and the application of such provision to other persons and circumstances shall not be affected thereby.


text:
(a)Except as provided in subdivision (c) or (d), all money received by the seller of health studio services from a consumer for a health studio facility that has not yet opened for business shall be held in trust and shall be deposited in a trust account established in a state or federally chartered bank or savings association. The seller shall not draw, transfer, or encumber any of the money held in trust until five business days after the health studio facility has opened and the seller has fully paid refunds to consumers who canceled their contracts as provided in subdivision (b) or in Section 1812.85.

(b) In addition to any other cancellation rights, a consumer who pays any money under a contract for health studio services for a health studio facility that has not yet opened for business has the right to cancel the contract and receive a full refund at any time prior to midnight of the fifth business day after the date the health studio opens for business. The cancellation right shall be set forth in the contract. The refund shall be paid within 10 days of receipt of notice of cancellation.

(c) Notwithstanding subdivision (a), a seller of health studio services may draw on money held in trust to pay refunds or may draw, transfer, or encumber funds to the extent that the amount is offset by a bond of equal or greater amount that satisfies this subdivision. The bond shall be issued by a surety insurer admitted to do business in this state and shall be filed with the Secretary of State. The bond shall be in favor of the State of California for the benefit of consumers harmed by a violation of this title.

(d) Subdivision (a) does not apply to a seller of health studio services that is, at the time money is received from the consumer, operating at least five health studio facilities in this state that have been in operation for a period of at least five years, and that has an excess of current assets over current liabilities of at least one million dollars ($1,000,000).

history: (History: Added by Stats. 2005, Ch. 439, Sec. 5. Effective January 1, 2006.)


text:
(a) Every contract which has as its purpose the lease or rental of athletic facilities for instruction, training, or assistance in physical culture, body building, exercising, reducing, figure development, or any other related physical skill, or for baseball, football, tennis, basketball, gymnastics, track and field, hockey, ice skating, weightlifting, wrestling, or bicycling shall contain the following warning statement in 10-point bold type:

Warning: Use of steroids to increase strength or growth can cause serious health problems. Steroids can keep teenagers from growing to their full height; they can also cause heart disease, stroke, and damaged liver function. Men and women using steriods may develop fertility problems, personality changes, and acne. Men can also experience premature balding and development of breast tissue. These health hazards are in addition to the civil and criminal penalties for unauthorized sale, use, or exchange of anabolic steroids.

(b) Commencing June 1, 1990, the warning statement required pursuant to subdivision (a) shall be conspicuously posted in all athletic facilities in this state which have locker rooms. At least one warning statement shall be posted in every locker room of the athletic facility.

(c) As used in this section, “athletic facilities” includes a health studio regulated pursuant to Title 2.5 (commencing with Section 1812.80), a professional boxers’ training gymnasium, as defined in Section 18685 of the Business and Professions Code, any privately owned sports facility or stadium in this state which is open to the general public, and any publicly owned sports facility or stadium in this state, including facilities in institutions of higher learning and schools that include any or all grades 7 to 12, inclusive.

(d) As used in this section, “anabolic steroids” include, but are not limited to, the following:

(1) Dianabol (methandrostenelone).

(2) Winstrol (stabozalol).

(3) Maxibolin (ethyl estrenol).

(4) Durabolin (nandrolone phenpropionate).

(5) Deca-Durabolin (nandrolone decanote).

(6) Testosterone propionate.

(7) Pregnyl (chorionic gonadotropin).

(8) Anavar (toxandroprione).

(e) When an athletic facility seeks to renew an operating license, if it can be demonstrated by a preponderance of the evidence that an athletic facility has not posted the sign required pursuant to this section, the licensing agency may impose a fine in the amount of fifty dollars ($50) per day for each day that the violation occurred, as a condition of obtaining the license renewal.

history: (History: Amended by Stats. 1989, Ch. 807, Sec. 2. Operative June 1, 1990, by Sec. 8 of Ch. 807. Note: Section 1812.98 is in Title 2.5, preceding the heading of Title 2.55.)

title: 2.55. CONTRACTS FOR THE LEASE OR RENTAL OF ATHLETIC FACILITIES


text: Nothing in this title is intended to prohibit month-to-month contracts. This section is declaratory of existing law.

history: (History: Added by renumbering Section 1812.97 (as added by Stats. 2005, Ch. 439) by Stats. 2006, Ch. 538, Sec. 49. Effective January 1, 2007. Note: Section 1812.97 is in Title 2.55, which follows this section.)


text:
(a) The Legislature finds that there exists in connection with a substantial number of contracts for discount buying services, sales practices and business and financing practices which result in fraud, deceit, and financial hardships being perpetrated on the people of the state; that existing legal remedies are inadequate to correct these abuses; that the discount buying industry has a significant impact upon the economy and well-being of this state and its local communities; and that the provisions of this title relating to such contracts are necessary for the public welfare.

(b) The purpose of this title is to safeguard the public against fraud, deceit, and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of discount buying services by prohibiting or restricting false or misleading advertising, unfair contract terms, harmful financial practices, and other unfair, deceptive, destructive, unscrupulous, fraudulent and discriminatory practices by which the public has been endangered and by which the public may in the future be harmed in connection with contracts for discount buying services. This title shall be construed liberally in order to achieve the foregoing purposes.

history: (History: Added by Stats. 1976, Ch. 237.)

title: 2.6. CONTRACTS FOR DISCOUNT BUYING SERVICES